Game Over for Greece, 5 Year Bond soars to 20%

If the default of Greece was a video game, we would be playing at the final stage just before the Game Over screen! Since Standard & Poor’s gave the country the world’s lowest credit rating this week, the Greek government seems unable to handle the situation. Meanwhile the Euro is not doing well either, falling from 1.47 to 1.41 today. What about the private investors who trusted the 5 Year Gvot Bond 2 years ago at 5%, and today’s bond charts show the bond value soaring above 20%! Parliament members are resigning one by one since yesterday and no one is willing to take control of the Ministry of Economy, let alone the governing of Greece. It sounds like Greeks are staring at the screen prompting them to insert coins for more credits! Are there any left?



Greek Govt 5 year bond - Bloomberg

Applying basic technical analysis on the bond chart, it is more than obvious that the resistance level at 17.5% has been broken, accompanied by a higher low peak in the end of May. There is not a single sign that the trend is reversing. Another important level had been at 15% as noted which is also come and gone. Things are even worse regarding the 2 year bond, that is approaching the 30% mark! The Greek spreads over German index is reaching over 1,500 basis points.



Greek Spreads over German chart - Bloomberg